Including hybrid and electric vehicles in company fleets pays off

AARTSELAAR, 8 May 2014 - A study recently conducted by Alphabet Belgium into the tipping point that prompts motorists to switch from petrol to diesel or electrically-powered cars shows that including hybrid and (semi-) electric vehicles as part of existing car fleets is an economically sound and sustainable business choice. Each year, the lease company scrutinises which power source is the best choice for motorists, based on purchase price, tax, non-reclaimable VAT, consumption and residual value. Whereas to date people largely went for petrol or diesel, the 2014 study now shows that alternative power sources can no longer be ignored. Even for motorists travelling over 25,000 km a year.

Belgium land of diesel?

In Europe, Belgium has a reputation as a traditional diesel country. Febiac figures for instance show that 69% of all cars newly registered in 2012 are diesel-powered, 30% are powered by petrol and 1.1% are hybrids and electrics. This distinction is even more prominent in the segment of company vehicles. According to Renta, 95% of registration in the leasing market in 2013 were diesel cars, and just 5% petrol.

As a leading lease company in Belgium and in Europe, Alphabet places a premium on providing companies with up-to-date and targeted advice in the area of mobility. Which is why each year the company surveys, per segment*, the cost of the most popular vehicles on the market, based on the Total Cost of Ownership (TCO). By way of these general trends and based on their own business activities, companies can decide the type of car or power source best suited to their own needs.

What about each segment?

In the smallest segments (Compact and Economy) and given an annual number of kilometres travelled that sits anywhere between 15,000 and 30,000 km, a petrol-powered vehicle is the most expedient choice in as good as all situations. Alongside petrol-powered cars, hybrid vehicles too are highly competitive in this category in spite of their higher purchase price. The fact of the matter being that the TCO of these cars works out at less, courtesy of the 120% tax deductibility, particularly favourable consumption and lower CO2 emission level and consequently the lower benefit in kind (BIK).

In the middle segments (Business and Business+), representing 70% of the Alphabet fleet on the road, diesel continues to remain the most rewarding type of fuel from 20,000 km and for an average 48-month running time. Businesses leasing over a shorter period of time, that is to say two or three years, should consider a petrol vehicle up to 20,000 km. However, here too, hybrids and from this segment onwards electric cars too, are seen to be well worth it. Vehicles such as the Nissan Leaf, the Peugeot Ion or the BWM i3, come with a higher purchase price tag, but the higher purchase outlay is offset by the lower TCO making these vehicles an economically sound choice.

Those looking for a large luxury car and travelling an average 25,000 km a year are better off with a traditional diesel engine, or a hybrid or electric car. You can lease hybrid cars as well the full electric variants (even though these currently remain less commonly available in this segment) at a cost similar to diesel-powered vehicles.

Alternative power sources are surprisingly affordable

This study shows that motorists and car fleet managers do well to also request a quote for a hybrid or an electric vehicle, alongside a calculation for a traditional car. Factoring in all TCO parameters, alternative power sources are surprisingly affordable. Moreover driving electric has come to take up its rightful place in any modern business policy and committing this type of vehicles has a favourable impact on the ecological footprint of any company. Which Alphabet believes is an aspect set to become increasingly more important in the years ahead.

Alphabet is a leading provider of Business Mobility in Europe. As such, it enables companies to manage their corporate mobility in an economical and sustainable way. Founded in 1997 as a division of BMW Group, Alphabet has gathered extensive knowledge of international fleet management and leasing. Its comprehensive portfolio includes consulting and funding as well as smart management products and services for company fleets. Alphabet?s Business Mobility solutions are tailor-made to meet specific corporate requirements. Today, Alphabet has more than 536,000 cars of all makes under management in 19 countries and is ranked fourth in the market. In Belgium, Alphabet manages more than 38.000 vehicles, earning Alphabet a spot in the top 3. Applying its expertise and technology, Alphabet also pioneers the creation of Advanced Mobility Solutions: AlphaElectric offers companies comprehensive eMobility, while AlphaCity is a cost-effective Corporate CarSharing option. For more information, please visit www.alphabet.be.